Eventually, possibly within my lifetime, a Big Mac meal is going to cost $50.
Is the problem the number or the concept?
Your salary should also go up so the only thing affected is the cash you hold. Would it be better if the currency would be version-bumped every 10 years and rescaled to remove the inflation?
I am curious if I’ll live long enough to see the United States issue higher denomination bank notes again.
Relative to what? Talk of BTC gaining value is primarily wrt USD; I'd be perfectly happy with my actual currency (GBP) gaining value wrt USD.
I suppose BTC can only 'deflate' in the long-run (and with an assumed supply of goods and services available in exchange for it) since the mintable volume is fixed. But perhaps it exposes that talking of currencies inflating is a bit sloppy, as it doesn't really make sense for BTC, and it's the economy or banking system that inflates really..
The existence of harder forms of money (gold, bitcoin, etc) is an expected consequence of how the system is designed, and not in any way a subversion of it. Somehow, both sides seem to miss this point.
Can you expand here? Governments don't want to incentivize storing value in order to encourage spending, but people want to be able to store value because that's what we've been doing since farming.
Is it because money is a medium of exchange and not a store of value?
So we empower central banks to intervene in various ways in the monetary system in order to achieve low inflation and system stability.
Activity is only the secondary objective. System stability is the first. Stability doesn't mean that markets cannot go up and down even violently. It means that when they go violently up and down, there remains faith in the currency and people are not suffering from mass unemployment, etc.
When a currency is healthy and has low inflation, hard assets are not a threat. Gold doesn't pay any interest, it doesn't have any earnings. You don't need to convince people to buy stocks and bonds instead of gold, they do that by themselves.
When a currency is unhealthy, hard assets can become a threat to it, but notably it's usually other fiat currencies that are the biggest threat.
Hard assets are useful tools for the financial system because they are less correlated with the market. You can criticise Bitcoin in various ways but the criticism that it is a hard asset with a fixed supply that by not inflating somehow damages the financial or monetary system doesn't land. Fiat money is intended to facilitate the existence of markets in other things, including hard assets.
You might not, I do.
Tell you what: you go short btc/usd, I'll go long btc/usd, and let's circle back in 10 years and see who did better.
> You might not, I do.
Then you don't want a currency. For something to be money it needs to (among other things) be a medium of exchange, and nobody really wants to trade away a thing today if they know it will be more valuable tomorrow.
Suppose you have some control over currency. You run a country. I'm that case, so you still want the currency to gain value compared to the alternatives?
Your choice is basically: holding currency is more profitable than building a house or running a business (or lending to those who do), or else less profitable. If you run a country, do you want houses and jobs and all that kind of thing, or do you want people to do better if they choose to hoard currency?
If I need a house today I'll buy it. I might not invest in real estate or stocks as much if my currency will be worth more tomorrow but I'll still buy stuff I need or want badly enough.
The bond seller is intending to put it to productive use to generate the yield.
This differs from deflation where people will (more the before) actually sit on money and not buy bonds. Then people who need liquidity cannot get it as the money supply drys up.
SPY has outperformed BTC over the last 5 years, and with far less volatility.